Boyd Gaming Corporation (NYSE:BYD), has approached PENN Entertainment, Inc. (NasdaqGS:PENN), to express interest in acquiring its peer that has a market value of more than $9 billion, including debt, according to people familiar with the matter. Penn's shares jumped 8% on June 20 afternoon in New York to $19.89 after Reuters reported Boyd's approach. Boyd's stock fell 3% to $51.90.

It would be challenging since Boyd, the smaller company with a market value including debt of $7.8 billion, would need financial firepower to clinch a deal. The companies would also need the blessing of regulators and officials in several states where they both operate. Boyd would also need to win over Walt Disney (DIS.N), which through its sports network ESPN has a partnership with Penn.

The sources said there was no certainty Penn will engage in negotiations with Boyd. They asked not to be identified because the matter is confidential. Penn declined to comment.

Boyd and Disney did not immediately respond to requests for comment.